Prolonged rainfall continues to raise sunflower prices in Ukraine

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Heavy rains continue in Ukraine for the third week and significantly delay the harvesting of sunflowers. Forecasts of recovery of rainfall from next week are forcing processors to step up purchases, increasing competition with exporters.

This week, sunflower purchase prices increased by another 500-1000 UAH/t to 16500-17000 UAH/t or $450-465/t, while last year they reached 18000-18500 UAH/t or $670-685/t, and the harvest, according to forecasts, will be almost halved. At the same time, demand prices for Ukrainian sunflower on DAP Romania and Bulgaria remain at a low level of $530-550/t due to increased supplies of own harvest and low oil prices on the world market.

In FY 2021/22 (as of September 1), Ukraine exported a record 1.63 million tons of sunflower seeds, which is 10 times higher than in FY 2020/21, although in August the pace of exports decreased sharply against the background of rising domestic purchase prices and falling prices in EU.

Despite the recovery of exports from the Black Sea ports, processors are still unable to establish stable shipments of meal, although its prices due to the increase in the price of feed grain have risen to $150-160/t for deliveries to the port and $250/t for deliveries to Poland, while in the summer, prices at DAP-Poland did not exceed $150/t.

Demand prices for Ukrainian sunflower oil remain at the level of $1050-1070/t FOB – Black Sea ports and $1180-1200/t DAP – ports of Romania and Bulgaria.

According to the Solvent Extractors Association (SEA), Argentina and the Russian Federation are becoming the main suppliers of sunflower oil to India, increasing supplies and displacing Ukraine from the market, which provided India with 70% of sunflower oil exports last season.

In August 2022, compared to August 2021, India increased the import of sunflower oil by 89.6% from 71.3 to 135 thousand tons, separately from Argentina – from 12.5 to 30.6 thousand tons, from Russia – from 28, 8 to 72.72 thousand tons, and from Turkey – to 14.6 thousand tons.

The delay in harvesting sunflowers and the need of processors for raw materials to start production in the near future will increase the demand for sunflowers. However, processors will not buy large batches of sunflower, fearing the possible closure of grain corridors after November 20.

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